In recent years, stakeholders such as customers, employees, suppliers, community groups, governments and even some shareholders have encouraged firms to undertake additional investments in corporate social responsibility.
This wiki will consider whether Corporate Social Responsibility is a new management trend within business in the present day. It will look at what exactly CSR is, the history of CSR, the reasons why businesses want to improve it and examples of different CSR initiatives used by companies when trying to improve it.
Definition
CSR is a concept with many different definitions and practices.It is a very broad concept that addresses many and various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions and contribution to economic development. Whatever the definition is, the purpose of CSR is to drive change towards sustainability.
Different Types of CSR:
There are four major areas of Corporate Social Responsibility that businesses tend to engage in.
These are as follows:
Economic Responsibilities
Legal Responsibilities
Ethical Responsibilities
Philanthropic Responsibilities
Economic Responsibilities
Economic responsibility is a business’ first and most important responsibility. That being said, the company also needs to be primarily concerned with turning a profit. As if the company is unable to do this then it will not last, employees will have to be laid off and taking care of their social responsibilities will be the last thing that the company will have to worry about. A company first needs to make sure it can be profitable and do well before it can start putting effort into being a good corporate citizen.
Legal Responsibilities
Next to ensuring that the company is profitable, the most important responsibility is ensuring that the company obeys all of the laws that are in place. Legal responsibilities can vary from security regulations to environmental law, labour law and even criminal law.
Ethical Responsibilities
The two biggest obligations of a company are its economic and legal responsibilities. A company can then concern itself with the ethical responsibilities after these two basic obligations are met. Ethical responsibilities are responsibilities that a company gives itself because its executives believe it's the most appropriate thing to do and not because they have an obligation to do so. Ethical responsibilities could include paying fair wages, being environmentally friendly, or refusing to do business with oppressive countries or unethical companies.
Philanthropic Responsibilities
If a company is able to meet all of its other responsibilities, it can then start meeting philanthropic responsibilities. These responsibilities are responsibilities that surpasses what the company believes is right and go above and beyond what is simply required. They involve making an effort to benefit society such as, engaging in projects to aid the environment, donating services to community organizations, or donating money to charitable causes.
History of CSR
Though the roots of the concept that we know today as corporate social responsibility have a long and wide-ranging history, it is mostly a product of the twentieth century, especially from the early 1960s up to the present time.
Events that first promoted CSR in the 1960's:
Date:
Event:
1960’s -
Sometime around the early 1960’s is the earliest reference to social auditing in a book by George Goyder called “The Responsible Company”. The book refers to multiple activities in the 1950’s and proposes that social audit can act as both a useful management tool and offer stakeholders a platform for challenging and influencing companies.
1960 -
OECD Created Convention was signed in Paris and came into force in 1961. The Organisation for Economic Cooperation and Development was created to encourage policies intended to:
Achieve the highest sustainable economic growth and employment and an increasing standard of living in member countries while continuing to support financial stability, and therefore contribute to the development of the world economy.
Contribute to the growth of world trade on a multilateral, non-discriminatory basis in agreement with international obligations.
Contribute to solid economic expansion in member and no member countries in the procedure of economic development.
1961 -
The World Wildlife Fund was created at Morges in Switzerland which is now the World-Wide fund for Nature. It will become a major non-governmental body in international conservation.
1962 -
Book published called ‘Silent Spring’ by Rachel Carson. This brings together research on toxicology, ecology and epidemiology to suggest that the levels of agricultural pesticides are growing to catastrophic. This is a new wave on environmentalism.
Consumer Bill of Rights in the USA.
1966 -
International Covenant on Economic, Social and Cultural Rights is adopted by the UN.
International Covenant on Civil and Political Rights is adopted by the UN.
1967 -
Action on Poverty and Economic Justice declared that: “Social justice and social value should be given consideration along with security and yield in the investment of funds held by religious organisations. Requests the Instrumentalities with substantial investments to study the social aspects of policies and practices with respect to investments and to report on such studies to the Executive Council” creating the foundations for the SRI.
1968 -
A global study was commissioned by The Club of Rome to model and analyse the dynamic interactions between population, natural resource consumption, food consumption, industrial production and environmental damage.
UNESCO holds a forum conference for Rational Use and Conservation of Biosphere for early of the concept of ecologically sustainable development.
1969 -
The first national agency for environmental protection is created after the US Congress passes the National Environmental Policy Act.
The principal of equal pay for equal work regardless of gender is adopted by the Commonwealth Arbitration Commission.
Events from 1970 onwards responsible for making CSR into what it is today:
1970s -
Germany engaged I the social model of corporate management.
Environmental bodies began in the USA began to rate companies on their social and environmental performance publicly.
Social Audit Limited was set up in the UK to carry out external audits on smaller companies.
Greenpeace was the first major organisations to adopt policies which stopped concentrating on governments more and moved towards taking direct action on the corporate sector.
The United Nation’s Code of Practice for Transnational Corporations was one of the first attempts to define CSR business principles in terms of disclosure of information, ethics, competition, product standards and marketing.
1970 -
The first ever Earth Day was held as an awareness campaign on the environment. Around 20 million people took part in peaceful demonstrations across America.
1971 -
In France, any companies with 300 employees or more had to produce an employee report which was required by law.
*
1972 -
The United Nations Conference on the Human Environment leads to the establishment of a number of national environmental protection agencies.
Measure of Economic Welfare was created which was the first alternative to GDP as a measure of economic progression.
1982 -
Business in the Community is founded in the UK which focuses corporate social responsibility.
1984 -
CSR becomes part of mainstream management theory following the publication of ‘Strategic Management: A Stakeholder Approach’ by Edward Freeman.
1985 -
The Antarctic ozone hole is discovered.
1988 -
The IPCC is created (Inter-governmental Panel on Climate Change)
The Co-Op UK publishes its first Social Report.
Ben and Jerry’s publishes its first assessment on social performance in the US.
1991 -
‘Caring for the Earth: 2nd World Conservation Strategy’ is published by IUCN, UNEP and WWF. This focuses on sustainability, sustainable living and sustainable society.
1992 -
180 country delegations meet at the Earth Summit in Rio de Janeiro to come up with a plan to stop the rapid destruction of natural resources and the pollution of the planet.
FairTrade is founded with the aim to improve the position of disadvantaged producers in developing countries.
1993 -
The right of people to a healthy environment and the right to develop was underscored at The World Conference on Human Rights.
1995 -
The World Business Council for Sustainable development bases itself permanently in Geneva. Their aim is to provide business leadership for change to promote the role of innovation, corporate social responsibility and sustainable development.
World Trade Organisation (WTO) is founded. This organisation oversees the world’s trading system.
1996 -
CSR Europe was created. Their main aim is to help companies achieve their goals in sustainability and profitability by placing corporate social responsibility in the mainstream of business practice.
1997 -
The ‘Triple Bottom Line’ term is first used as John Elkington publishes ‘Cannibals with Forks’. This is where companies prepare three different bottom lines, these being profit and loss, social responsibility and environmental responsibility.
The Sustainability reporting guidelines were launched by the Global Reporting Initiative.
1999 -
‘A better quality of life – A strategy for sustainable development for the UK’ is launched by the UK Government.
Later that year ‘Quality of life counts – Indicators for a strategy for sustainable development for the UK: a baseline assessment’ is also published.
The Dow Jones Sustainability Indexes is created. This is the first global tracking of the financial performance of world leading sustainability driven companies.
2000 -
Pension schemes are required to disclose their policies on socially responsible investment as the UK Pension Act is amended.
2001 -
The UK Government publishes ‘Achieving a better quality of life’ which is its first review of sustainable development progress.
FTSE4Good index is launched – This is designed to measure the performance of companies demonstrating strong Environmental, Social and Governance practices.
2002 -
Business in the Community celebrated its 20th anniversary. A two-day conference was held on corporate responsibility.
Business in the Community launches its initial Corporate Responsibility Index.
2004 -
By 2004 there are over 60 Government initiatives of relevance of CSR. The UK parliament has an all-party group on Corporate Social Responsibility and an all-party group on Social Responsible Investment.
Examples of Companies focusing on CSR
Tesco
As one of the largest retailers in the world it is of upmost importance that Tesco focus strongly on their Corporate Social Responsibility as they employ over 476,000 people across 11 countries.
Tesco focus on 6 major areas when it comes to their Corporate Social Responsibility:
Food Waste
Health
Human rights and Labour standards
Environment
Supplier Relationships
Business ethics and anti-bribery
Food Waste:
Only retailer to publish assured data on UK food waste in own operations.
Commitment that by end of 2017, no food that’s safe for human consumption will go to waste from UK stores.
Roll-out of food surplus donation programmes across the Group.
Health:
Cutting the sugar content of all our UK soft drinks by an average of 5% each year.
Providing free fruit for children in all our large UK stores.
Raised over £13.7 million for our National Charity Partnership with Diabetes UK and the British Heart Foundation.
Human Rights and Labour Standards:
42 locally-based responsible sourcing specialists across the world.
Social programmes supporting nearly 450,000 people in communities we source from, over the last two years.
Shortlisted for the Thomson Reuters Foundation 2016 Stop Slavery Award.
Environment:
Reduced our absolute carbon emissions by 3.1% year on year.
Expanded the MSC label scheme for pre-packed and frozen fish as well as fish counters.
First UK retailer to join the Sustainable Agriculture Initiative.
Supplier Relationships:
Standardisation of payment terms across UK and Central Europe.
New supplier helpline in Central Europe and new supplier website in Thailand following successful UK launch in 2015.
Recognised as the most improved retailer by Groceries Code Adjudicator’s 2016 annual survey.
Business ethics and anti-bribery:
Launched refreshed Code of Business Conduct.
Refreshed training programmes for colleagues on anti-bribery, income recognition, and supplier codes where relevant.
Awareness campaign for our ‘Protector Line’ whistleblowing hotline.
As you can see from the video, Tesco focus a lot on:
Local community; schools, charities etc.
Fundraising – Total of almost £75 million by 2012.
Tackling climate change – aiming for zero carbon.
Helping decrease unemployment levels.
Equality in gender in employment.
The Co-operative
The Co-operative is one of the world’s largest co-operatives and is owned by millions of members. It is the UK’s fifth biggest food retailer with over 2,500 local stores and it is also: the UK’s number one funeral provider, a major insurer and a legal services business.
Being owned by this many members and being responsible for so many business activities, it is important for The Co-op to focus heavily on their Corporate Social Responsibility in order to keep up the success and reputation of the brand.
A quote from The Co-op’s ‘Ethical Plan 2013-15’:
“The Co-operative has always had a purpose beyond profit, and recognises that some things are plainly unjust and need to be tackled, with or without a business case. We’ve learnt that we need to manage and develop our business in a sustainable manner, and will always be transparent and accountable in our pursuit of this. We are guided by the long-established co-operative values of self-help, self-responsibility, democracy, equality, equity and solidarity.”
There are 8 major areas that the Co-op focus on when it comes to their CSR:
Democratic Control and Reward
Supporting Co-operatives
Keeping Communities Thriving
Inspiring Young People
Protecting the Environment
Tackling Global Poverty
Responsible Retailing
Responsible Finance
In the video below is the Head of Energy Enterprise & Sustainable Development for The Co-op discussing CSR within the organisation:
What is a New Trend in Management?
A trend is a general development or change in a situation or in the way that people are behaving. In this case the trend will be which methods of management are currently being used in the modern world of business.
Management is the organization and coordination of the activities of a business in order to achieve defined objectives.
Taking both of these definitions into account we can now conclude that a new trend in management is a new method or behaviour that is being used to coordinate and organise business activities to reach their set goals.
Is CSR a new trend in management?
As we can see from the long list of pivotal Corporate Social Responsibility events within history, this shows that the idea of CSR is certainly not new. But as the years goes on it has become a much more important focus point for governments and businesses due to the increasing push for environmental protection, human rights and ethical business trading by worldwide organisations.
It is certainly a trend in management as focusing on Corporate Social Responsibility ensures that you cover the economic aspects of the business, ensure that it is profitable as well as the legal, ethical and philanthropic aspects. Managing all of these appropriately will build the foundations for a successful business.
Conclusion
We can conclude that CSR is a very important management trend as it aims for the best possible outcome for each stakeholder that is involved and is currently being used by most businesses and organisations across the world. It is not a new trend in management overall but is becoming for popular and being adopted by more and more organisations as time goes on.
McWilliams, A. and Siegel, D. (2000) 'Corporate Social Responsibility and Financial Performance: Correlation or Misspecification?', 21(Strategic Management Journal), pp. 603.
Corporate Social Responsibility (266581)
Table of Contents
In recent years, stakeholders such as customers, employees, suppliers, community groups, governments and even some shareholders have encouraged firms to undertake additional investments in corporate social responsibility.
This wiki will consider whether Corporate Social Responsibility is a new management trend within business in the present day. It will look at what exactly CSR is, the history of CSR, the reasons why businesses want to improve it and examples of different CSR initiatives used by companies when trying to improve it.
Definition
CSR is a concept with many different definitions and practices.It is a very broad concept that addresses many and various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions and contribution to economic development. Whatever the definition is, the purpose of CSR is to drive change towards sustainability.Different Types of CSR:
There are four major areas of Corporate Social Responsibility that businesses tend to engage in.
These are as follows:
Economic Responsibilities
Economic responsibility is a business’ first and most important responsibility. That being said, the company also needs to be primarily concerned with turning a profit. As if the company is unable to do this then it will not last, employees will have to be laid off and taking care of their social responsibilities will be the last thing that the company will have to worry about. A company first needs to make sure it can be profitable and do well before it can start putting effort into being a good corporate citizen.Legal Responsibilities
Next to ensuring that the company is profitable, the most important responsibility is ensuring that the company obeys all of the laws that are in place. Legal responsibilities can vary from security regulations to environmental law, labour law and even criminal law.Ethical Responsibilities
The two biggest obligations of a company are its economic and legal responsibilities. A company can then concern itself with the ethical responsibilities after these two basic obligations are met. Ethical responsibilities are responsibilities that a company gives itself because its executives believe it's the most appropriate thing to do and not because they have an obligation to do so. Ethical responsibilities could include paying fair wages, being environmentally friendly, or refusing to do business with oppressive countries or unethical companies.Philanthropic Responsibilities
If a company is able to meet all of its other responsibilities, it can then start meeting philanthropic responsibilities. These responsibilities are responsibilities that surpasses what the company believes is right and go above and beyond what is simply required. They involve making an effort to benefit society such as, engaging in projects to aid the environment, donating services to community organizations, or donating money to charitable causes.History of CSR
Though the roots of the concept that we know today as corporate social responsibility have a long and wide-ranging history, it is mostly a product of the twentieth century, especially from the early 1960s up to the present time.
Events that first promoted CSR in the 1960's:
Events from 1970 onwards responsible for making CSR into what it is today:
- In France, any companies with 300 employees or more had to produce an employee report which was required by law.
*Examples of Companies focusing on CSR
Tesco
As one of the largest retailers in the world it is of upmost importance that Tesco focus strongly on their Corporate Social Responsibility as they employ over 476,000 people across 11 countries.Tesco focus on 6 major areas when it comes to their Corporate Social Responsibility:
Food Waste:
Health:
Human Rights and Labour Standards:
Environment:
Supplier Relationships:
Business ethics and anti-bribery:
As you can see from the video, Tesco focus a lot on:
The Co-operative
The Co-operative is one of the world’s largest co-operatives and is owned by millions of members. It is the UK’s fifth biggest food retailer with over 2,500 local stores and it is also: the UK’s number one funeral provider, a major insurer and a legal services business.Being owned by this many members and being responsible for so many business activities, it is important for The Co-op to focus heavily on their Corporate Social Responsibility in order to keep up the success and reputation of the brand.
A quote from The Co-op’s ‘Ethical Plan 2013-15’:
“The Co-operative has always had a purpose beyond profit, and recognises that some things are plainly unjust and need to be tackled, with or without a business case. We’ve learnt that we need to manage and develop our business in a sustainable manner, and will always be transparent and accountable in our pursuit of this. We are guided by the long-established co-operative values of self-help, self-responsibility, democracy, equality, equity and solidarity.”
There are 8 major areas that the Co-op focus on when it comes to their CSR:
In the video below is the Head of Energy Enterprise & Sustainable Development for The Co-op discussing CSR within the organisation:
What is a New Trend in Management?
A trend is a general development or change in a situation or in the way that people are behaving. In this case the trend will be which methods of management are currently being used in the modern world of business.
Management is the organization and coordination of the activities of a business in order to achieve defined objectives.
Taking both of these definitions into account we can now conclude that a new trend in management is a new method or behaviour that is being used to coordinate and organise business activities to reach their set goals.
Is CSR a new trend in management?
As we can see from the long list of pivotal Corporate Social Responsibility events within history, this shows that the idea of CSR is certainly not new. But as the years goes on it has become a much more important focus point for governments and businesses due to the increasing push for environmental protection, human rights and ethical business trading by worldwide organisations.
It is certainly a trend in management as focusing on Corporate Social Responsibility ensures that you cover the economic aspects of the business, ensure that it is profitable as well as the legal, ethical and philanthropic aspects. Managing all of these appropriately will build the foundations for a successful business.
Conclusion
We can conclude that CSR is a very important management trend as it aims for the best possible outcome for each stakeholder that is involved and is currently being used by most businesses and organisations across the world. It is not a new trend in management overall but is becoming for popular and being adopted by more and more organisations as time goes on.
References: